Autos: Fiat and Chrysler are stronger together

Jul. 5, 2013

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Written by

Casey Williams

Star correspondent

The 2014 Fiat 500L was jointly developed by Fiat and Chrysler, with Italian style and enough space for mainstream America. Prices for the 160-horsepower, four-door, five-seat hatchback start at just over $19,000. / Photo provided by Fiat

The Thema, a rebranded second-gen Chrysler 300, and Voyager, based on the iconic Chrysler Town & Country minivan, are sold in Europe under the Lancia brand.. / Photo provided by Lancia

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I recently attended the media preview of the 2014 Fiat 500L. It’s a cool car, jointly developed by Fiat and Chrysler, with Italian style and enough space for mainstream America.

It is the four-wheeled embodiment of the company that builds it.

German overlords

While I was driving the 500L, I thought back to the party I attended when Daimler and Chrysler merged in 1998. It was a flashy affair with classic cars, chocolate rivers, cigars and the band Squirrel Nut Zippers.

Billed a “merger of equals,” it turned out to be anything but. Stockholders got rich; everybody else got torqued.

Daimler never understood Chrysler’s markets, and the American team never particularly cared for its arrogant overlords. The unfortunate results were cars like the Chrysler Sebring, on which doors didn’t fit properly and which was loaded with cheap plastic.

An engineer tasked with fixing that hot mess recently told me, “It was an embarrassment.”

No doubt. But it wasn’t all bad.

The Mercedes-derived Chrysler 300, Dodge Charger/Challenger and Jeep Grand Cherokee continue to delight owners. When Daimler finished laying its pile, it sold Chrysler to Cerberus in 2007. Rarely does an investment group exhibit long-term vision.

Cerberus did not, and finished driving Chrysler into bankruptcy.

Italian wedding

Upon Chrysler’s emergence from that bankruptcy on June 10, 2009, Fiat took over and generously shared small-car technology.

Talking to company managers and engineers, one gets the sense that Fiat is entirely different than Daimler. CEO Sergio Marchionne works exceedingly hard to make Chrysler a success. Employees understand each other culturally and play in similar markets, leveraging strengths for the benefit of all.

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The first glimmer of hope was the little Fiat 500, of which 100,000 have been sold in the U.S.

The 500L should double the car’s sales and set up Alfa Romeo for a return to the U.S. this fall with the 4C sports car. Next-generation versions of the Alfa Romeo Giulietta, which shares engineering with the Dodge Dart, will follow. Fiat management has been a strong supporter of the air-suspended 25 mpg Ram pickup and SRT Viper.

You won’t have to wait long to see more joint efforts.

The Dart/Giulietta underpinnings are shared with the 2014 Jeep Cherokee and Fiat 500L, while the Ram ProMaster van is a face-lifted Fiat. The Lancia brand sells versions of the Chrysler 300 and minivans. Fiat sells Dodge’s Journey as the Freemont in Europe. Jeep will expand globally through Fiat’s distribution channels.

No product will remain unleveraged.

Merger coming

Fiat helped Chrysler pay off its government loans. The group is 61.8 percent owned by Fiat and 38.2 percent owned by the UAW’s VEBA fund. Fiat is negotiating with the UAW to acquire its share so a full merger of the American and Italian entities can proceed.

It’s not outside the realm of possibilities for the combined company to be headquartered in Detroit.

We won’t even discuss the ruckus that would cause in Italy, but when Marchionne sets his mind to a challenge, he rarely fails. Neither does Chrysler’s fire-trialed team.

With brands ranging from Fiat through Dodge, Ram, Jeep, SRT, Chrysler, Alfa Romeo, Maserati and Ferrari, the company will have the full quiver it needs to compete globally. Keep watching.